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Raleigh, N.C. — A group of Triangle real estate professionals, including brokers and developers, were sentenced in federal court Monday and Tuesday for mortgage fraud.

The group was convicted of using phony purchases of properties through "straw buyers" to secure mortgage loan disbursements exceeding $20 million and $5 million in loan proceeds between 2003 and 2009. The group is accused of using the buyers' credit to obtain the loans in exchange for a kickback and a promise that rental income from the properties would pay the mortgages and the buyers would never pay a cent.

Losses on the properties, which fell into foreclosure when the housing market collapsed in 2008 and mortgage payments on the properties ceased, exceed $1 million, authorities said.

“Mortgage fraud impacts the financial stability of our country’s housing markets,” John Strong, special agent in charge of the FBI in North Carolina, said in a statement. “These individuals manipulated programs that make it possible for others to live the American dream of owning their own homes.”

The following people were convicted and sentenced in the scheme:

Developer Vincent Maldini, 46, of Seabright, N.J., received five years in prison, five years probation and must pay $667,859 in restitution.

Developer Ricky Lamont Congleton, 43, of Zebulon, received 5.5 years in prison, five years probation and must pay $4.3 million in fines and restitution.

Mortgage broker Dexter Tirrell Jones, 42, of Raleigh, received 2.5 years in prison, five years probation and must pay $1.3 million in restitution.

Closing attorney Phillip Graham Rose, 42, of Raleigh, received 3.5 years in prison, five years probation and must pay $1.5 million in restitution.

Developer Johnny Ray Peele, 43, of Wake Forest, received 2.5 years in prison, five years probation and must pay $728,244 in restitution.

Developer Dwayne Thomas Hall, 49, of Wake Forest, received 3.25 years in prison, three years probation and must pay $1.2 million in restitution. In addition, $7.2 million in cash proceeds were forfeited.

Real estate broker Treshell Mayo Herndon, 39, of Raleigh, received 2.75 years in prison, five years probation and must pay $1 million in restitution “as well as the criminal forfeiture of several million dollars in gross criminal proceeds,” prosecutors said in a statement.

Straw buyer Joseph Carl Hollis, 35, of Raleigh, received five years probation, including 18 months on house arrests, and must pay $198,500 in restitution.

50s ChildOct 29, 2014

Yes, their profession was real estate. People are crooked in all types of professions

— Posted by SAY 'WHAT" ONE MORE TIME!

I'll come right out and say I have never met an honest realtor, and I've bought and sold six houses in three different states.

And in this state, the Real Estate commission helps the realtors by refusing to discipline them.

GatsbyOct 29, 2014

Want to know why homes are at all time highs while your take home is stuck at 1974 wages?Greed & Scams cost us all in the end...You, Me ...Our Children & even their kids foot the bill for these robberies.

Mike HillOct 29, 2014

The Democrat piece of legislation from Barney Frank and Chris Dodd known as the Community Reinvestment Act, blackmailed banks into making sub-standard loans. You cannot wish someone without money to pay a mortgage. I have rental properties and it was a "free for all," during this period for buying investment properties and primary residences.

Bill MooneyOct 29, 2014

Glad to see someone going to jail but this $20-million. The guys who robbed the US citizens of Billions just agree to pay fines, which come out of the pockets of shareholders and they never go to jail. Wall Street banks, freed from regulation caused the problem. Read about it (from someone other than Bill O'Reilly).

raphael27520Oct 29, 2014

Noticed most of the "Developers " had prior Narcotics convictions?Just your typical Subprime Mortgage Fraud courtesy of the Federal Government "Community Re-Investment Act" where if you had a pulse, no job needed, bad credit OK- You could get a Mortgage.

A personOct 29, 2014

A personOct 29, 2014

I told them 6 years ago that they would end up in prison over this scam, but they thought they could get away with it.

jimcricket15Oct 29, 2014

"And some say keep the government out of business. Major mistake, it was lack of regulations That caused the mortgage meltdown after the repeal of the Glass-Stegall Act in the late 90s.

It was the Government that set the table for the meltdown. It was the Government that pushed sub-prime lending. Lack of regulations you say? Well then how is it these folks are being punished. We USED to have solid mortgage lending practices in this country until the Government destroyed it. Even now you can get a mortgage with only 5 percent down, less if you get an FHA or VA loan. Yes the dishonest took advantage, but the Government created the conditions under which these things could happen. I mostly blame Dems but Reps did pretty much nothing to fix what had been broken. Glas-Steagal, yep never should have been repealed. Again, GOVERNMENT ACTION.

SAY 'WHAT" ONE MORE TIME!Oct 29, 2014

View quoted thread

Real Estate professionals? Really?

— Posted by denisdh

Yes, their profession was real estate. People are crooked in all types of professions

icdmbppplOct 29, 2014

View quoted thread

And some say keep the government out of business. Major mistake, it was lack of regulations That caused the mortgage meltdown after the repeal of the Glass-Stegall Act in the late 90s

— Posted by Bill Brasky

Banks are in business to make money, not lose it. When they were forced to dumb down requirements for mortgage loans, that was the beginning of the meltdown. Starting in the mid 90's, anyone with a heartbeat could get a home loan--good credit or proof of income not required. Countrywide was supported by Fannie and Freddie, and they made bad loans and sold them to investors. Bad laws created the housing meltdown. Government does nothing well but the military. They've harmed education, created a welfare state, and a soon-to-be meltdown of the insurance industry and the healthcare system.